Par
Petroleum Corporation (OTCBB: PARR) announced today that its
subsidiary, Hawaii Pacific Energy, LLC (“HPE”), has completed its
purchase of Tesoro Hawaii, LLC (“Tesoro Hawaii”) from Tesoro
Corporation. The purchase price is comprised of $75 million in cash plus
market value of net working capital and a contingent earnout payment of
up to $40 million. The acquired assets include a 94,000 barrel per
day-capacity refinery; storage capacity for 2.4 million barrels of crude
oil and 2.5 million barrels of refined products; and related logistics
assets, including five refined product terminals, 27 miles of pipelines
and a single point mooring terminal. In addition, HPE has rights to sell
gasoline through a network of 31 Tesoro-branded retail stations in
Hawaii. Tesoro Hawaii, which will be renamed Hawaii Independent Energy,
LLC (“HIE”), will operate as a separate wholly-owned subsidiary of Par
Petroleum and will be headquartered in Oahu, Hawaii.
The refinery produces gasoline, jet fuel, high sulfur diesel, low sulfur
fuel oil and high sulfur fuel oil. It is also a leading supplier of
ultra-low sulfur diesel to the Hawaiian Islands and has a Nelson
complexity rating of 5.7x. Major process units include crude
distillation, vacuum distillation, hydrocracking, naphtha hydrotreating,
reforming and visbreaking. The refinery is located in the Campbell
Industrial Park in Kapolei, approximately 20 miles west of Honolulu.
“We are looking forward to being a reliable and productive member of the
Hawaii business community, and we have the right team to optimize this
asset,” commented Will Monteleone, Chairman of the Board of Directors
and Chief Executive Officer of Par
Petroleum. “I have to recognize the employees on the Islands who we
have come to know. Despite the uncertainty at the refinery over the past
two years, they have maintained operational excellence and have
performed at, or exceeded, industry safety metrics.”
Par
also completed the previously announced $125 million ABL revolving
facility with Deutsche Bank and a crude oil supply and intermediation
arrangement with Barclays. Barclays will provide crude oil and
feedstocks to the refinery on a realtime basis. In conjunction with the
acquisition, Par completed a $200 million private placement of common
stock at $1.39 per share which was led by existing shareholders Zell
Credit Opportunities Fund and funds managed on behalf of Whitebox
Advisors.
Par Petroleum Corporation
Par
Petroleum Corporation is a Houston-based company that manages and
maintains interests in a wide variety of energy-related assets. Par is a
financially strong company with an active, opportunistic growth
strategy. We look for operations with strong fundamentals and great
employees who can move the business forward. Par’s management team has
deep experience in the energy industry and acquiring and integrating
energy-related business and assets.
Par’s largest oil and gas asset is an investment in Piceance Energy,
LLC, which owns and operates natural gas reserves located in the
Piceance Basin, Colorado. In addition, Par’s operating activities are
concentrated in its wholly-owned subsidiaries, Texadian
Energy and HIE.
Texadian Energy sources, markets, transports and distributes crude
petroleum-based energy products. With significant logistics capability
in historical pipeline shipping status, a rail car fleet, and expertise
in contracted chartering of tows and barges, Texadian believes it has a
long term competitive advantage in moving crude oil efficiently from
land locked locations in the Western U.S. and Canada to the refining
hubs in the Midwest, the Gulf Coast, and the East Coast.
Forward-Looking Statements
This press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical fact are forward-looking
statements. Forward-looking statements are subject to certain risks,
trends and uncertainties that could cause actual results to differ
materially from those projected. Among those risks, trends and
uncertainties are risks that the Company may be unable to achieve the
benefits contemplated by the acquisition of Tesoro Hawaii; risks that
not all potential risks and liabilities have been identified in the
Company’s due diligence of Tesoro Hawaii and its business; risks that
Tesoro Hawaii and its business may not be integrated successfully or
that such integration may require a disproportionate amount of
management’s attention and the Company’s resources; risks that HPE, HIE
and HIE Retail, LLC may not operate profitably; risks that anticipated
cost efficiencies or synergies may not be realized; and risks associated
with other potential negative effects from the transaction. Although the
Company believes that in making such forward-looking statements its
expectations are based upon reasonable assumptions, such statements may
be influenced by factors that could cause actual outcomes and results to
be materially different from those projected. The Company cannot assure
you that the assumptions upon which these statements are based will
prove to have been correct. Other important risk factors that may affect
the Company’s business, results of operations and financial position are
discussed in its most recently filed Annual Report on Form 10-K, recent
Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and
other Securities and Exchange Commission filings.
Copyright Business Wire 2013